As Oregon’s legislature considers bills to cap climate pollution and drive Oregon’s clean energy economy through new investment, some naysayers are at it again, trying to paint a fearful picture of Oregon’s economy under the program. But Oregon only has to look at existing programs in other states to see track records showing that decarbonizing our economy is a huge opportunity.
Northeastern U.S.: Regional Greenhouse Gas Initiative
Nine states in the Northeast and Mid-Atlantic region (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont) have been implementing a cap-and-invest program called the Regional Greenhouse Gas Initiative (RGGI) since 2008. Under RGGI, carbon pollution from power plants is capped and reduced over time. Power plant owners pay to emit each ton of carbon pollution under the cap by purchasing permits to emit (called “allowances”) at auction. Revenue from the auction is then invested in energy efficiency measures and clean energy projects in the participating states’ local communities.
Before RGGI was implemented, naysayers argued that reducing carbon pollution through RGGI would cost too much and lead to economic decline. One study financed by industries that would be regulated predicted electricity rates would skyrocket and the region’s economy would suffer. Yet actual results since the RGGI program was implemented show the opposite: the economy grew as emissions decreased. Energy prices actually went down and the region enjoyed substantial health benefits.
Since RGGI was implemented, nine Northeastern states have experienced:
• 8% economic growth
• 45% decrease in power plant emissions
• $4.7 billion saved by residents and businesses on their energy bills
• $5.7 billion saved from reduced health issues
• 16,000 jobs created from RGGI-related investments
Since 2008, the RGGI region’s economy grew by more than 8% while carbon pollution from power plants covered by RGGI went down by about 45%. Investments of auction revenue in energy efficiency and renewable energy programs resulted in energy bill savings of more than $4.7 billion. In other words, electricity bills went down under the cap-and-invest program – quite the opposite from skyrocketing prices. Money saved on energy bills is money that does not leave the RGGI states and can be invested back in the states’ economies. RGGI-related investments also created 16,000 jobs.
These investments also reduced air pollution, improving health while reducing the states’ contribution to climate change. The total health savings under RGGI have added up to $5.7 billion and avoided about 830 adult deaths, up to nearly 10,000 asthma exacerbations, 14,500 respiratory illnesses, and 44,000 lost workdays.
California: Cap and Trade Program
In five years, California’s cap and trade program has helped the state:
• Grow its economy by 14%
• Reduce the climate pollution from regulated industries by 10%
• Attract $48 billion in clean economic investments
• Invest $1.2 billion in the state
• Create 500,000 jobs (over ten years)
California’s cap and trade program, which took effect in early 2012, offers another glimpse of the benefits Oregon can reap by pricing carbon pollution. Despite gloom and doom reports issued by industry beforehand, California’s economy (GDP) has grown 14% since 2012 while its climate emissions for regulated entities dropped 10% over the same time period. California attracted $48 billion in clean economic investments and created 500,000 jobs in the last ten years. In 2016, Bloomberg named California the #1 state in which to do business.
Overall, the program has reinvested $1.2 billion into the state, with $3.4 billion allocated to agencies for future projects. Proceeds generated through California’s cap and trade program have been used to help the communities that have been most harmed by pollution. In the first round of funding, the most impacted and underserved communities received $272 million for public transit, affordable housing, urban forestry, home weatherization, clean energy and cleaner vehicles. California’s program also links to Quebec’s cap and trade program, and will soon link to Ontario.
Oregon’s Clean Energy Jobs Opportunity
Oregon can achieve similar benefits by passing a Clean Energy Jobs bill, such as Senate Bill 557. This program is designed to link into the North American carbon market and function similarly to California’s cap and trade program. Capping climate pollution and investing in clean energy and sustainable programs in our communities can benefit Oregon the same way that RGGI is benefitting nine Northeastern and Mid-Atlantic states and California’s cap and trade program is benefitting its people and economy.
Early projections estimate the Clean Energy Jobs bill (a “cap-and-invest” program) could raise at least $700 million per year for clean energy investments. Better yet, Oregon’s proposed strategy prioritizes investment in low income, historically disadvantaged, and rural neighborhoods, so that communities most impacted by climate change benefit first. As we have seen in the real experience of states that have priced carbon pollution already, Oregon has a tremendous opportunity to reduce climate pollution and invest in our state’s clean energy future.